Market Verdict on Iron Ore：
• Neutral to bullish.
Macro
• China Automobile Association suggested that the 50% cut on vehicle purchase tax would increase 2 million sales units, equal to 300 – 350 billion yuan.
• EU sets harshest Russian sanctions targeting oil and insurance.
Iron Ore Key Indicators:
• Platts62 $136.55, +0.05, MTD $136.55. Seaborne PBF gathered interests after import margin improved significantly. Iron ore seaborne trades significantly increased on last Friday and this Monday. Rio Tinto sold few laycans of Fe61% PBF on fixed price. BHP sold JMBF discount at $9-10. However steel mills margin was in 0 area, the marginal profit of some northern mills were even negative, which resist the big spike of current materials in mid-run level. Virtual steel margin was squeezed to extreme low area because iron ore increased faster than steel.
SGX Iron Ore 62% Futures& Options Open Interest (Jun 1st)
• Futures 70,251,900 tons(Increase 2,311,200 tons)
• Options 70,328,000 tons(Increase 1,132,500 tons)
Steel Key Indicators
• The supply chain blockages in U.S. caused by Covid-19 pandemic continued as well as labor shortages exacerbated the delays in vessels and loading/unloading operation at port areas which prevent buyers from accepting attractive overseas offers.
Coal Indicators
• An HCCA offer was heard at $434/mt FOB Australia, which was $16 lower compared to two days ago because of lack of buying interest.
